In the face of ongoing trade tensions, Apple Inc.
What Happened: The iPhone maker is planning a price hike but is keen to dispel any notion that a possible price increase is tied to U.S. tariffs on Chinese goods, where most of its devices are assembled, according to a report by The Wall Street Journal on Monday.
Facing supply chain pressures, Apple is considering raising iPhone prices to protect profits, while seeking non-tariff reasons to justify the hike, though new feature details remain unclear. Notably, the company is preparing to launch new iPhones this fall, which will include design updates such as an ultrathin profile.
CEO Tim Cook has been navigating the U.S.-China trade tensions, which threaten Apple's supply chain. In response, he has increased inventory levels and moved some U.S.-bound manufacturing to India. However, production of Apple's high-end models like the Pro and Pro Max will largely remain in Chinese factories, as India's infrastructure and technical capacity are not yet advanced enough to support large-scale production on par with China's current capabilities, sources told the publication.
Apple is also exploring the possibility of shifting some iPhone production to the U.S., a move that could take several years. In the meantime, its shift toward manufacturing smartphones in India for export to the U.S. is expected to gain momentum.
Why It Matters: Apple's potential price hike comes amid a series of strategic moves and product innovations. Earlier in May, Apple's CEO, Tim Cook, discussed the possibility of relocating iPhone production to the U.S. with U.S. Commerce Secretary Howard Lutnick. This was followed by the news of Apple bracing for a $900 million tariff impact, as revealed by Cook during the company's fiscal second-quarter earnings call.
Notably, Apple is reportedly planning a significant year in 2027, with plans to introduce a range of innovative devices and features, including a foldable iPhone and smart glasses. These developments highlight Apple's ongoing efforts to navigate trade tensions while maintaining its commitment to innovation and customer satisfaction.
Despite these strategies, Apple may still find it challenging to counterbalance China tariff costs solely through supplier savings, potentially affecting its profit margin unless it can increase prices. However, executives are wary about attributing price increases to tariffs, after the White House slammed Amazon Inc.
Apple holds a momentum rating of 49.76% and a quality rating of 82.46%, according to Benzinga's Proprietary Edge Rankings.
